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Exam 11: Cost-Volume-Profit Analysis

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Question 61

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If sales total $5,000,000, fixed costs total $400,000, and variable costs are 2,750,000, the contribution margin ratio is 45%.

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Question 62

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Cost-volume-profit analysis can be presented in both graphically and equation form.

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Question 63

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Rouney Co.has budgeted that factory supervisors' salary will increase by 10%.If selling prices and all other cost relationships are held constant, next year's break-even point would:

The break-even point (in units) is calculated by dividing the total estimated fixed costs by the net sales of a period.

A company operated at 82% of its capacity for the past year.Fixed costs during this time were $152,000, variable costs were 60% of sales, and sales were $790,000.Calculate the company's operating profit.

Which of the following is true of a variable cost?

Which of the following activity bases would be the most appropriate for food costs of a hospital?

Which of the following conditions would cause the break-even point to increase?

If the unit selling price is $50, the volume of sales is $450,000, sales at the break-even point amount to $375,000, and the maximum possible sales are $550,000, the margin of safety will be 2,000 units.

Currently, fixed costs are $540,000, the unit selling price is $95, and the unit variable cost is $60.What would be the break-even sales (in units) , if the unit selling price is increased by $10?

Only a single line, which represents the difference between total sales revenues and total costs, is plotted on the profit-volume graph.

Break-even analysis is a type of cost-volume-profit analysis.

ABC Co.manufactures pens.During the most productive month of the year, 3,650 pens were manufactured at a total cost of $84,550.During its slowest month, the company made 1,250 pens at a cost of $46,150.Calculate the total fixed cost using the high-low method of cost estimation.

If the volume of sales is $6,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety will be 25%.

Calculate break-even sales (in units) when fixed cost is $216,000, unit selling price is $120, and unit variable cost is $60.

The following information is given for the maintenance department of Goldenrod Co.Calculate the variable costs per unit using the high-low method. ? $\begin{array} { l c c } & \text { Cost } & \text { Production in units } \\\text { July } & \$ 2,100 & 14,000 \\\text { August } & 1,000 & 9,000 \\\text { September } & 1,800 & 10,000 \\\text { October } & 4,000 & 21,000\end{array}$

If direct materials cost per unit decreases, the amount of sales necessary to earn a desired amount of profit will decrease.

Foggy Co.has the following operating data for its manufacturing operations: $\begin{array} { l r } \text { Unit selling price } & \$ 250 \\\text { Unit variable cost } & \$ 100 \\\text { Total fixed costs } & \$ 840,000\end{array}$ ? The company has decided to increase the wages of hourly workers, which will increase the unit variable cost by 10%.Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%.If sales prices are held constant, the break-even point for Foggy Co.will:

Omega Inc.is expecting a reduction of $25,000 in fixed costs of $725,000.What will be the change in break-even sales (in units) , if selling price per unit is $50 and the unit variable cost is $35?

Which of the following graphs illustrates the behavior of a total fixed cost within the specified relevant range? ​ ​